financial services komal 1

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INDUSTRIAL PROJECTONFINANCIAL SERVICES

PUNJAB NATIONAL BANK(HOUSING LOAN)

SUBMITTED BY:

KOMAL RANJAN

REG NO: CUJ/1/2010/IMBA/14

6TH SEM., IMBA


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CONTENTS

1. Introduction

Aim & objectives of project Industry overview

2. Literature Review

3. Organizational Profile

History Vision & mission Organisation structure Product profile Trend Analysis SWOT Analysis

4. Research Methodology

Source of data Tools and techniques used

5. Analysis of data

6. Interpretation and findings

7. Limitations

8. Recommendations

9. Conclusion

10. Bibliography


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ACKNOWLEDGEMENT

"Gratitude is not a thing of expression; it is more matter of feeling."

There is always a sense of gratitude which one express towards others for their help and supervision

in achieving the goals. This formal piece of acknowledgement is an attempt to express the feeling of

gratitude towards people who helpful me in successfully completing of my training.

I would like to express my deep gratitude to our Head of Department of Business Administration Prof.

T.Ghoshal for providing me an opportunity to work on this Industrial Project on Financial Services. I

would also thank our guide Mr. Ashok Sarkar sir who always gave valuable suggestion throughout the

pursuance of this project.

Above all no words can express my feelings to my parents, friends all those persons who supported

me during my project.


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OBJECTIVE

To study the various services provided by Punjab National Bank. To study in detail housing loan provided by the PNB.

LITERATURE REVIEW

Home loans are provided based on the market value, mainly estimation given by banks or the

registration value of the property. Availing various types of house loans to suit individual needs at the

lowest rates & easy financing can now fulfil the need for a house of ones own. Home loan is not a

one-time decision; one has to review the market periodically before availing them. Today there are

unlimited numbers of banks in country wanting to give out Home loans. Given this scenario, it may

seem easy getting a loan. Buyers tend to make mistakes while entering into deals, which may not be

beneficial for them, so better compare all the variables before signing a loan agreement by different

banks. However the loan agreement should be finalized only after reading the terms and conditions

carefully. One can apply for a Home loan even before one select ones property. The loan amount

would be sanctioned or approved for individual, based on his/her repayment capability.

With so many real estates sites coming up in Indian market, finding an ideal house isn't that big a

issue nowadays, when one can virtually see all across the home one need to purchase by the various

real estate simulation programs and videos available, but one still need to purchase it, to really say

"own" it. A home loan, also popularly identified as a mortgage, is an easier financial option to own a

house. Once one has decided to endeavour on a home loan, there are so many things that one need to

be informed with. Not only is it going to be an emotional experience, it is also going to be a very

informative monetary journey, as one will be dealing with the whole caboodle of the mortgage

process along the way.

There are thousands of home loan companies waiting to provide with financial needs. Part of the

success of this whole financial move is partly in ones hands, the greater part relies on the efficiency

of ones chosen mortgage company.

Owning a piece of land or property is a lifetime dream for every individual. There are many home

loans provider in the market to make dream come true. But before one opts for any home loan

provider, he need to consider certain factors related to property that he is interested in buying and also

about the salient features offered by a home loan provider and also study some Home Loans and

Home Insurance FAQs which helps in applying a Home Loan in India. The most important thing is

one should know about each and every term related with Home Loans before applying for a Loan. It is

always advisable to consult a home loan expert or consultant before applying for a home loan orpurchasing a property. There are different types of home loans tailored to meet needs.

Home Purchase Loans: These are the basic forms of home loans used for purchasing of a new

home.

Home Improvement Loans: These loans are given for implementing repair works, healing and

renovations in a home that has already been purchased.

Home Construction Loans: These loans are available for the construction of a new home.

Home Extension Loans: These loans are given for expanding or extending an existing home. For

e.g.: addition of an extra room etc.


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Home Conversion Loans: These loans are available for those who have financed the present home

with a home loan and wish to purchase and move to another home for which some extra funds are

required. Through home conversion loan, the existing loan is transferred to the new home including

the extra amount required, eliminating the need of pre-payment of the previous loan.

Land Purchase Loans: These loans are available for purchasing land for both construction andinvestment purposes.

Bridge Loans: Bridge loans are designed for people who wish to sell the existing home and purchase

another one. The bridge loans help finance the new home, until a buyer is found for the home.


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INDUSTRY OVERVIEW

The Financial Services are services provided by different businesses whose transactions involve

management of money such as banks, credit card firms, investment companies, insurance companies

and some government agencies. . The finance industry is an industry in itself as well as an ancillary

that supports other industries. Trade and commerce across the world would come to a standstill ifthere was no means to fund, pay and protect the transactions. The following institutions are a part of

the financial industry:

Banks- Bank is one kind of financial services organizations. Banks generally function by providing a

sheltered and secure place for people to store their money. Usually, banks will invest their clients'

stored money for the bank's gain, while paying a small amount of interest to those who keep their

money in savings or checking accounts. Banks often provide a variety of financial services, including

the issuance of loans, mortgages, checks, and credit cards. Some banks are known as private banks

and offer services only to those who have a high net worth. Generally, private banks will offer a

broader range of services to their clients than other banks.

Credit card companies- Credit card companies are financial services companies which provide lines

of credit to consumers in exchange for interest paid on the money consumers borrow when they

charge a purchase to the card. The card company pays for the purchase, but it does so by essentially

issuing a high-interest loan to the purchaser.

Insurance companies- Insurance brokers are hired to find appropriate insurance plans for their

clients. Insurance providers offer plans which are designed to defer liability for the risk of loss from

one entity to another in exchange for a predetermined amount. This makes the second entity, typically

an insurance provider, liable for any losses accrued by the first entity, typically an individual or

company. Thus, a person will pay a health insurance provider, for example, a recurring fee so that the

provider will be responsible for the payment of medical bills should that person fall sick or injured.

Investment Services- Investment services, another type of financial service, generally deals with

helping individuals and other entities invest their money in stocks, shares or funds. These services

usually offer financial products for investors to buy, such as mutual funds. Usually, money invested

with an investment service is managed by the service for the gain of the individual investor or a group

of investors. Additionally, they may render professional advice to investors in exchange for payment.


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BANKING SECTOR

Banking in India originated in the last decades of the 18th century. The oldest bank in existence in

India is the State Bank of India, a government-owned bank that traces its origins back to June 1806

and that is the largest commercial bank in the country. Central banking is the responsibility of the

Reserve Bank of India, which in 1935 formally took over these responsibilities from the then ImperialBank of India, relegating it to commercial banking functions. After India's independence in 1947, the

Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the

14 largest commercial banks; the government nationalized the six next largest in 1980.Currently,

India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the

Government of India holding a stake), 31 private banks (these do not have government stake; they

may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined

network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating

agency, the public sector banks hold over 75 per cent of total assets of the banking industry, with the

private and foreign banks holding 18.2% and 6.5% respectively.

From Independence, it took some years for the banking sector to mature. By 1960s, the Indian

banking industry did occupy an important position to facilitate the development of the Indian

economy. Moreover, it did employ a quantum volume which could affect national economy. It

resulted in a debate about the possibility to nationalize the banking industry. At that point, during the

annual conference of the All India Congress Meeting, in a paper entitled "Stray thoughts on Bank

Nationalisation", Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI

favouring nationalisation. The paper was received with positive enthusiasm. Thereafter, in a swift and

sudden move, the GOI issued an ordinance and nationalised the 14 largest commercial banks with

effect from the midnight of July 19, 1969. The decision was even termed as a "masterstroke of

political sagacity" by none other than a leader of the stature of Jaypraksh Narayan. Then, within the

next fortnight of issuing the ordinance, the Parliament passed the Banking Companies (Acquisitionand Transfer of Undertaking) Bill. The bill finally received the presidential approval on 9th August,

1969. In 1980, there came the second phase of nationalisation of 6 more commercial banks. The

reason forwarded for this was to have more control of credit delivery by the government. By the time,

GOI effectively got hold of 91% control of the total banking business of India. Till 1990s, all

nationalised banks grew at a pace of around 4%, similar to the average growth rate of the Indian

economy.

Current situation- Today, the banking sector in India is fairly mature in terms of supply, product

range and reach. As far as private sector and foreign banks are concerned, the reach in rural India still

remains a challenge. In terms of quality of assets and capital adequacy, Indian banks are considered to

have clean, strong and transparent balance sheets relative to other banks in comparable economies in

its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the

government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without

any fixed exchange rate. Till now, there is hardly any deviation seen from this stated goal which is

again very encouraging. With passing time, Indian economy is further expected to grow and be strong

for quite some time-especially in its services sector. The demand for banking services, especially

retail banking, mortgages and investment services are expected to grow stronger. Therefore, it is not

hard to forecast few M&As, takeovers, and asset sales in the sector. Consolidation is going to be

another order of the day. The significant change in the policy and attitude that is currently being seen

is encouraging for the banking sector growth. In March 2006, the Reserve Bank of India allowed

Warburg Pincus, a private foreign investor, to increase its stake in Kotak Mahindra Bank to 10%.

Notably, this is the first time that a foreign individual investor has been allowed to hold more than 5%


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in a private sector bank since 2000. Earlier, The RBI in 2005 announced that any stake exceeding 5%

by foreign individual investors in the private sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the

Government of India holding a stake), 29 private banks (these do not have government stake; they

may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined

network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating

agency, the public sector banks hold over 75 per cent of total assets of the banking industry, with the

private and foreign banks holding 18.2% and 6.5% respectively.3 Despite the current global

slowdown, despite the fear of US economic recession, despite the volatility of Indian stock markets,

every informed observer is more or less optimistic about the 8% to 10% growth per annum for the

Indian economy till the next few years. Therefore, it can safely be said that the banking industry in

India will only surge ahead in coming years. We can also expect to see many other sea changes in

terms of their operations, funding and structures.


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ORGANIZATIONS PROFILE

Name of organization: Punjab National Bank

Head Office: Bhikaji Cama Place, New Delhi

Origin of the Organization

Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the distinction of

being the first Indian bank to have been started solely with Indian capital. The bank was nationalised

in July 1969 along with 13 other banks. From its modest beginning, the bank has grown in size and

stature to become a front-line banking institution in India at present.

Growth and Development

With over 38 million satisfied customers and 4668 offices, PNB has continued to retain its leadership

position among the nationalized banks. The bank enjoys strong fundamentals, large franchise value

and good brand image. Besides being ranked as one of India's top service brands, PNB has remainedfully committed to its guiding principles of sound and prudent banking. Apart from offering banking

products, the bank has also entered the credit card & debit card business; bullion business; life and

non-life insurance business; Gold coins& asset management business, etc.

Since its humble beginning in 1895 with the distinction of being the first Indian bank to have been

started with Indian capital, PNB has achieved significant growth in business which at the end of June

2012 amounted to Rs 6,79,823 crore.

Present Status of the Organization

PNB has always looked at technology as a key facilitator to provide better customer service andensured that its IT strategy follows the Business strategy so as to arrive at Best Fit .The bank has

made rapid strides in this direction. Along with the achievement of 100%branch computerization, one

of the major achievements of the Bank is covering all the branches of the Bank under Core Banking

Solution (CBS), thus covering 100% of its business and providing Anytime Anywhere banking

facility to all customers including customers of more than 2000 rural branches. The bank has also

been offering Internet banking services to the customers of CBS branches like booking of tickets,

payment of bills of utilities, purchase of airline tickets etc. Towards developing a cost effective

alternative channels of delivery, the bank with more than 2150 ATMs has the largest ATM network

amongst Nationalised Bank. With the help of advanced technology, the Bank has been a frontrunner

in the industry so far as the initiatives for Financial Inclusion is concerned. With its policy ofinclusive growth in the Indo-Gangetic belt, the Banks mission is Banking for Unbanked. The Bank

has launched a drive for biometric smart card based technology enabled Financial Inclusion with the

help of Business Correspondents/Business Facilitators (BC/BF) so as to reach out to the last mile

customer. The BC/BF will address the outreach issue while technology will provide cost effective and

transparent services. The Bank has started several innovative initiatives for marginal groups like

rickshaw pullers, vegetable vendors, dairy farmers, construction workers, etc. The Bank has already

achieved 100% financial inclusion in 21,408 villages. Backed by strong domestic performance, the

bank is planning to realize its global aspirations. Bank has expanded its footprints into 10 countries.

Bank also has overseas branches in Hong Kong, Dubai, Kazakhstan, UK, Sydney, Australia and

Norway. A second branch in Hong Kong at Kowloon was opened in the first week of April09. Bank

is also in the process of upgrading its representative offices at China, Norway and Australia. Bank is


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also exploring possibilities for presence in Maldives, South Africa, Bangladesh, Myanmar, Pakistan

and Brazil.


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ORGANIZATIONAL STRUCTURE

Bank has its Corporate Office at New Delhi and supervises 68 circle offices under which the branches

function.The delegation of power is decentralised upto the branch level to facilitate quick decision

making.

Head Office

7,Bhikhaji Cama Place,New Delhi-110026

CGM Offices

Circle Offices(68)

Branches(5937)

Hierarchy

Chairman

Executive Director(ED)

Chief General Managers (CGM)

General Managers (GM)

Deputy GM

Assistant GM

Chief Managers

Senior Managers

Managers

Officers

Clerical/Subordinates


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Board Of Directors

Shri K.R.Kamath Chairman & Managing director,Chairman of Indian Banks' Association

Shri Rakesh Sethi Executive DirectorSmt. Usha Anathasubramanian Executive Director

Shri S.R.Bansal Executive Director

Directors

Shri Anurag Jain Govt of India Nominee Director

Shri N S Vishwanathan Reserve Bank Of India Nominee Director

Shri M.A.Antulay Part time non official Director

Shri B.B.Chaudhary Part time non official Director

Dr. Sunil Gupta Shareholder Director

Shri Devinder Kumar Singla Shareholder Director

Shri MN Gopinath Shareholder Director

Tara Chand Jhalani Workmen Employee Director

Departments of the Organization

The bank has following departments:

Finance Personal Administration Human Source Sales & Marketing Retailing Treasury Management Information Technology


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PRODUCT PROFILE OF THE ORGANIZATION

Saving Account

PNB Prudent Sweep

Total Freedom Salary Account

PNB Vidyarthi Salary Account

PNB Mitra SF Account

Current Accounts

Smart Romer

PNB Vaibhav

PNB Gaurav

F ixed Deposit Accounts

Spectrum fixed deposit scheme

Anupam account

Multi benefit deposit scheme

Special fixed deposit scheme

Recurring deposit scheme

PNB swecha jama yojna/flexi rd

Credit schemes

Housing loan

Car finance

Personal loan

Professional loan

Educational loan scheme

Loan against mortgage of property

PNB financial basket scheme

Personal loan scheme for pensioners

Privilege card scheme

Other credit scheme


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Social Banking

Farmers

Krishi card

Agriculture credit scheme

PNB farmers welfare trust

Women

Scheme for house wife and other women

Mahila udhyam nidhi scheme


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PNB HOME LOAN

Punjab National Bank provides its customers with various Home loan policies and features at highly

competitive rates. They know the needs of the Indian customers that they have to deal with, on a

regular basis, and provide the policies accordingly. The PNB Home Loan caters mainly to the

requirement of the middle class individuals of India, as PNB itself is one of the leading public sectorbanks of the nation.

The PNB Home loans are very easily available, and have an even easier process of repayment that is

given over a prearranged time period. This period of time is determined, when the PNB Home loans

are being finalized and along with the loans, the buyers get the opportunity of having a life insurance

covered against him. The basic grounds on which the PNB Home loans are provided are:

Extending, repairing, modification and even renovating of an already existing building or flat. Purchase or building of new house or flat.

The basic interest of PNB home loans be around 9.25% and the time period may vary from a period ofminimum 5 years to a maximum of 25 years. However there is a certain limitation of the loan amount

that an individual may take from the bank. The maximum amount of loan sanctioned under PNB

home loans is need based. Apart from all these details, the PNB Home loans also enable us to choose

between fixed and floating rates that may be applicable from time to time and keep varying from one

period to another.

TRENDS IN HOUSING LOAN MARKET IN INDIA

The Indian real property market has witnessed an unprecedented rise in the realty and land prices in

the last ten years or so. In the present condition the best investment option most people would rely on

is buying a home. Home is the safest investment because it is one of the few assets whose valueappreciates over the years.

Following the boom in the real estate market, a healthy competition can be witnessed in the housing

finance sector, as more and more banks and financial institutions are entering the house loan market.

The market is flooded by various housing finance schemes offered by these banks and financial

institutions and the ultimate beneficiaries are the consumers as they have got plenty of options to

choose from according to their requirements.

The immediate impact of rising competition in the housing loan sector can be seen in the rates of

interest charged by various banks. Most of the banks and financial institutions are offering housing

loans at competitive interest rates and innovative house loan products. The standard interest rate in themarket today is 8 to 8.5% per annum for a five-year loan. However, the terms and conditions for

housing loans differ from one bank to the other.

The budget 2013 has brought good news for New Home loan customers. Home loans up to Rs 25 lac

will be allowed additional deduction of interest of 1 lac. This will mean that the customers who are

running home loans up to 25 lac can save on tax and will have more net income to hold on to.


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Outstanding housing loans of HFCs

(as onMarch31)(` Billion)

2009 2010 2011

Outstanding loans 1,268.23 1,531.88 1,864.38

(-16.12%) (-20.79%) (-

21.71%) Source: National HousingBank

Figures in bracket reflect the year-on-year percentage growth.

Growth Rate of Number of Accounts and Outstanding Amounts in the Housing Sector Portfolio of Commercial Banks

(in per cent)

Accounts Outstanding

Mar-08 9.05 9.25

Mar-09 13.03 15.55

Mar-10 11.53 8.72

Source:Statistical Tables Relating to Banks in India, RBI.

0

5

10

15

20

2530

35

Jan-08 Jan-09 Jan-10

Growth Rate of Number of Accounts

and Outstanding Amounts in Housing

Sector Portfolio Of Commercial Banks

Outstanding

Accounts


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0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

2,000.00

2009 2010 2011

Outstanding loans

Outstanding loans


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COMPETITORS OF PUNJAB NATIONAL BANK

Current Floating Home Loan Interest Rates of SBI

BankName

Up to 30 Lacs From 30 lacs to 75 Lacs Above 75 lacs

SBI 9.95% p.a. 10.10% p.a. 10.10% p.a.

Current Home loan rates of Hdfc Ltd

LoanSchemes

Upto & including Rs 30 lacs above 30lacs to 75lacs above 75lacs

HDFC Ltd(Floating

Rates)

10.15% 10.40% 10.40%

Current Home Loan Interest Rates of ICICI Bank Home Loan

Loan Schemes Up to 30 Lacs From 30Lacs to 75 Lacs Above 75 Lacs

ICICI BankHome Loan

Scheme I :10.25% (Fixed 1yr)

Scheme II : 10.25% (Fixed2yrs)

Scheme III : 10.50% (Fixed

3yrs)then 10.25%

Scheme I :10.50% (Fixed 1yr)

Scheme II : 10.50% (Fixed2yrs)

Scheme III : 10.75% (Fixed

3yrs)then 10.50%

Scheme I :10.50% (Fixed1 yr)

Scheme II : 10.50%(Fixed 2yrs)

Scheme III : 10.75%

(Fixed 3yrs)then 10.50%


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SWOT Analysis

Strength

1. Diversified operations with 5100 branches

2. Strong I. T support with best fit approach

3. Schemes for small and medium scale businesses

4. It is the second largest state-owned commercial bank in India

with about 5000 branches across 764 cities

5. Its 56,000+ workforce serves over 37 million customers

Weakness

1. Less penetration in the urban areas

2. Inadequate advertising and branding as compared to other

banks

3. Legal issues regarding employees caused a bad name of PNB

Opportunity

1. Small scale business banking across India2. Expansion in other countries for international banking

3. Installation of more ATMs and better customers services

Threats

1. Economic crisis and economic fluctuations

2. Highly competitive environment

3. Stringent Banking Norms by the RBI and the Govts


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RESRARCH METHODOLOGY

Research methodology is a way to systematically show the research problem. It may be understood as

a science of studying how research is done scientifically. It is necessary for the researcher to know not

only the research methods but also the methodology.

Source of Data:

To fulfil the objectives of the study the data is collected from secondary source.

Secondary Source:It was collected from internal sources. The secondary data was collected on the

basis of organizational file, official records, newspapers, magazines, management books, preserved

information in the companys database and website of the company.

Tools and Techniques Used: Descriptive

Balance sheet of the last 5 years

Profit and Loss A/C of the last 5 years

Interest rates of PNB home loans and other banks


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PROCEDURE OF HOME LOAN SANCTIONING

PNB Housing Finance Limited is a wholly owned subsidiary of Punjab National Bank, one of theleading nationalized banks. PNB provides a wide array of home loans to address varied customerneeds.

Advantages of taking Home Loan from PNBHFL

Provides an extensive range of home loan products like Home Purchase Loans, HomeConstruction Loans, Home Extension Loans, Home Improvement Loans and Plot Loans.

Pan India branch network Robust service delivery model - door step services ensuring easy and fast approval &

disbursal of loans Excellent post disbursement services Facility of enhancement in loan amount in the event of escalations in cost Dedicated team of well-experienced employees who work on best-in-class information

systems & network to deliver and provide customer satisfaction High standards of ethics, integrity and transparency Various repayment options

PNB Apna Ghar Yojana home loans are meant for construction or for acquisition/ purchase of house/

flats. The minimum loan amount would be Rs.50,000/- and maximum loan amount depends on therepayment capacity of the borrower. In case of joint application, income of borrowers /co-borrowersare clubbed together for calculation of loan eligibility. The loan repayment is in Equated MonthlyInstallments (EMI) over a maximum period of 20 years.

Eligibility:

Individuals in permanent service or having their own business (Resident or non-resident). Age of the applicant should not be more than 60 years in case of service class and 65 years in

case of businessman or self-employed.

Documents needed

Self-employed and salaried require different documents to support the housing finance deal. Beforesigning the Home Loan documents, all terms and conditions should be rechecked.

A customer must understand and agree with each of the clauses in the documents before agreeing to

sign the loan deal.

Common Documents

Valid address proof: Voter Card, Ration Card, Aadhaar Card, Driving License and so on. Age proof:Voter Card, Ration Card, Aadhaar Card, Driving License and so on. Last six months Bank account statement Income proof and passport size photograph of the applicant and co-applicant

For Salaried customers:

Employment certificate from the employer Form 16


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Copies of pay slip for last few months and TDS certificate

For Self-employed:

If it is a partnership firm then copy of partnership deed or copy of memorandum ofassociation; and articles of association if it is a company.

Copy of audited financial statement for last two years Income tax assessment order Profit and loss details for last few years

Loan amount:

Minimum loan amount would be Rs.50,000/- and maximum loan amount depends entirely onthe repayment capacity of the borrower(s).

Actual loan eligibility shall be on the basis of repayment capacity as determined be PNBHFLtaking into account income, age, qualification and occupation.

Income of borrower(s) / co-borrower(s) shall be clubbed together for calculation of loaneligibility/ the level of finance in case of joint application

Margin:

The borrower's contribution shall be minimum 20% of the total cost of project, including stamp dutyand registration charges.

Interest rates: (Effective from 1.1.2009)

For loan upto Rs.20 lakhs

Period Floating Rate of Interest(%)3 yrs Fixed Rate of Interest(%)

1-15 years *10.25 13.00

16-20 years 10.50 13.00

For loan above Rs.20 lakhs

Period Floating Rate of Interest(%)3 yrs Fixed Rate of Interest(%)

1-15 years 11.25 13.00

16-20 years 11.25 13.00

Builders and bodies corporate (Non Housing): 15.50%

Builders and bodies corporate (Housing): 15.00%


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Security:

Security for the loan is first charged by way of equitable/registered mortgage of the property to befinanced and/or such other collateral securities as may be necessary. Loans to allot tees of flats/housesof development authorities or members of co-op. housing societies or reputed private builders can beconsidered on the basis of tripartite agreement and/or interim security. With respect to property underconstruction, interim security may be required. Collateral/interim security may be assignment of LifeInsurance Policies, guarantees from sound and solvent guarantors, pledge of marketable shares andsuch other investments acceptable to PNBHF.

Loan disbursement:

For outright purchase of house/flat, the loan amount will be paid in lump-sum to the vendor at thetime of registration after satisfying that the borrower has paid/provided for the balance amount. Forhouses/flats under construction, the loan amount will be disbursed in stages based on the progress ofconstruction. Disbursement will be made after the property has been technically appraised and all

legal documentation has been completed. The borrower has to invest his proportionate share of thecost, prior to disbursement of loan.

The loan can be disbursed either in lump sum or installments according to the requirement of thedevelopment authority/ society/ private builder.

Loan repayment:

Loan repayment shall normally be in Equated Monthly Installments (EMI) comprising of principaland interest over a maximum period of 20 years. The table below shows the EMI for a loan of Rs.1,00,000/- at different rates of interest.

No. of Years /Termof loan

11.00% 11.25% 11.50% 11.75% 12.00% 12.25% 12.50% 12.75% 13.00% 13.25%

05 2175 2187 2200 2212 2225 2238 22250 2263 2276 2289

07 1713 1726 1739 1752 1766 1779 1793 1806 1820 1833

10 1378 1392 1406 1421 1435 1450 1464 1479 1494 1508

15 1137 1153 1169 1185 1201 1217 1233 1249 1266 1282

20 1033 1050 1067 1084 1102 1119 1137 1154 1172 1190

Special repayment plans:

In deserving cases, Instalments may be fixed in increasing/decreasing order or in lump sum or evenlinked to Life Insurance Policies, under PNB Housing Finances special repayment plans like :

Graduated repayment plan Decreasing repayment plan LIC linked repayment plan Balance payment facility


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PNB HOME LOAN SCHEMES

PNB home loans are categorised under normal and flexible variants.The current BASE RATE is -9.50%

Repayment

Period

Fixed option Floating option

Up to

Rs.20Lac

Above

rs.20Lac

Up to

Rs.30Lac

Above Rs.30Lac-

Rs.75Lac

Rs.75Lac and

above

Up to 5 years 8.75% 9.50% BR+0.50% BR+1.25% BR+1.50%

5 years10

years9.00% 9.50% BR+0.75% BR+1.50% BR+1.75%

10 years- 15

years9.25% 9.75%

BR+0.75%BR+1.50% BR+1.75%

15 years -20

years9.25% 9.75% BR+1.00% BR+1.75% BR+2.00%

20 years -25

years9.50% 10.00% BR+1.00% BR+1.75% BR+2.00%


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DATA ANALYSIS

BALANCE SHEET OF PNB

Particulars Mar'12 Mar'11 Mar'10 Mar'09 Mar'08

Liabilities 12 Months 12 Months 12 Months 12 Months 12 MonthsShare Capital 339.18 316.81 315.3 315.3 315.3

Reserves & Surplus 26,028.37 19,720.99 15,915.63 12,824.59 10,467.35

Net Worth 27,817.07 21,508.56 17,722.92 14,653.63 12,318.35

Secured Loans 37,264.27 31,589.69 19,262.37 4,374.36 5,446.56

Unsecured Loans 3,79,588.48 3,12,898.73 2,49,329.80 2,09,760.50 1,66,457.23

TOTAL LIABILITIES 4,44,669.82 3,65,996.97 2,86,315.09 2,28,788.49 1,84,222.13

Assets

Gross Block 5,265.08 4,981.60 4,215.21 3,930.36 3,699.64

(-) Acc. Depreciation 2,096.22 1,876.01 1,701.74 1,533.25 1,384.12

Net Block 1,719.34 1,634.84 1,021.48 883.37 779.83

Capital Work in

Progress.

0 0 0 0 0

Investments. 1,22,629.47 95,162.35 77,724.47 63,385.18 53,991.70

Inventories 0 0 0 0 0

Sundry Debtors 0 0 0 0 0

Cash And Bank 28,828.03 29,691.21 23,473.56 21,413.14 18,830.72

Loans And Advances 3,03,567.64 2,50,366.08 1,92,921.28 1,59,723.19 1,23,882.41

Total Current Assets 3,32,395.67 2,80,057.30 2,16,394.84 1,81,136.33 1,42,713.13

Current Liabilities 13,524.18 12,328.27 10,317.69 18,130.13 14,798.23

Provisions 0 0 0 0 0

Total Current

Liabilities

13,524.18 12,328.27 10,317.69 18,130.13 14,798.23

NET CURRENT

ASSETS

3,18,871.49 2,67,729.03 2,06,077.15 1,63,006.20 1,27,914.91

Misc. Expenses 0 0 0 0 0

TOTAL ASSETS

(A+B+C+D+E)

4,44,669.82 3,65,996.97 2,86,315.09 2,28,788.49 1,84,222.13

PROFIT & LOSS A/C OF PNB


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Mar'12 Mar'11 Mar'10 Mar'09 Mar'08

12Months

12Months

12Months

12Months

12Months

INCOME:Sales Turnover 39,711.53 29,804.40 24,524.78 21,907.42 15,925.65

Excise Duty 0 0 0 0 0

NET SALES 39,711.53 29,804.40 24,524.78 21,907.42 15,925.65

Other Income 0 0 0 0 0

TOTAL INCOME 40,391.30 30,448.56 24,961.37 22,460.42 16,157.27

EXPENDITURE:

Manufacturing Expenses 0 0 0 0 0

Material Consumed 0 0 0 0 0

Personal Expenses 4,723.48 4,461.10 3,121.14 2,924.38 2,461.54

Selling Expenses 37.16 39.68 40.11 31.24 23.31

Administrative Expenses 4,352.95 3,611.34 2,377.28 1,880.13 1,247.47

Expenses Capitalised 0 0 0 0 0

Provisions Made 939.06 340.78 353.62 373.15 229.07

TOTAL EXPENDITURE 10,052.65 8,452.89 5,892.14 5,208.91 3,961.40

Operating Profit 7,584.35 6,513.14 6,042.24 4,776.35 3,462.46

EBITDA 8,264.11 7,157.30 6,478.82 5,329.35 3,694.08

Depreciation 292.26 255.85 222.83 191.06 170.23

Other Write-offs 0 0 0 0 0

EBIT 7,971.85 6,901.45 6,256.00 5,138.29 3,523.85Interest 23,013.59 15,179.14 12,944.02 12,295.30 8,730.86

EBT 7,032.79 6,560.67 5,902.37 4,765.15 3,294.78

Taxes 2,152.84 2,130.23 1,999.43 1,676.04 1,247.15

Profit and Loss for the Year 4,879.95 4,430.44 3,902.94 3,089.11 2,047.63

Non Recurring Items 4.25 3.05 2.42 1.78 1.13

Other Non Cash Adjustments 7.88 0 0 0 0

Other Adjustments -7.88 0 0 0 0

REPORTED PAT 4,884.20 4,433.50 3,905.36 3,090.88 2,048.76

KEY ITEMS

Preference Dividend 0 0 0 0 0Equity Dividend 746.19 696.99 693.67 630.6 409.89

Equity Dividend (%) 220 219.99 220 200 130

Shares in Issue (Lakhs) 3,391.79 3,168.12 3,153.02 3,153.02 3,153.02

EPS - Annualised (Rs) 144 139.94 123.86 98.03 64.98

COMPARISON OF PNB HOME LOANS WITH OTHER BANKS


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10 Year Floating Home Loan Rates

Product name ICICI HomeLoan

PNB HomeLoan

SBI Home Loan

Interest rate 10.75% 10.75% 10.00%

Processing Fee 0.50% 0.50% 0.25%EMI Rs. 27,268 Rs. 27,268 Rs. 26,430

Number of EMI 120 120 120

Total interest to be paid Rs. 12,72,128 Rs. 12,72,128 Rs. 11,71,618

Total amount to be repaid Rs. 32,72,128 Rs. 32,72,128 Rs. 31,71,618

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

ICICI Home Loan PNB Home Loan SBI Home Loan

10 Year floating home loan rates of

PNB,ICICI &SBI Bank

Interest rate

Processing Fee

Rs.26,000

Rs.26,200

Rs.26,400

Rs.26,600

Rs.26,800

Rs.27,000

Rs.27,200

Rs.27,400

ICICI Home Loan PNB Home Loan SBI Home Loan

Floating EMI

EMI


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10 Year Fixed Home Loan Rates

Product name HDFC Homeloan

PNB Home Loan SBI Home Loan

Interest rate 14.00% 10.75% 11.00%

Processing Fee 1% 0.50% 0.25%

EMI Rs. 31,053 Rs. 27,268 Rs. 27,550

Number of EMI 120 120 120

Total interest to be paid Rs. 17,26,394 Rs. 12,72,128 Rs. 13,06,000

Total amount to be

repaid

Rs. 37,26,394 Rs. 32,72,128 Rs. 33,06,000

0.00%

2.00%

4.00%6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

HDFC Home loan PNB Home Loan SBI Home Loan

10 Year fixed home loan rates of

PNB,HDFC &SBI

Interest rate

Processing Fee

Rs.25,000

Rs.26,000

Rs.27,000

Rs.28,000

Rs.29,000

Rs.30,000

Rs.31,000

Rs.32,000

HDFC Home loan PNB Home Loan SBI Home Loan

EMI

EMI


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INTERPRETATION

While making the comparison of PNB Home Loans with Home Loans of Other Banks following

findings were recorded:

The PNB Fixed home loans were good as according to customer perception as compared toHDFC Bank and SBI Bank.

The Fixed Interest rates of PNB Bank are less as compared to SBI Bank and HDFC Bankwhich is good.

In the 10 years Fixed Home Loan Rates the processing fee of PNB Bank is slightly less thanHDFC Bank but more than SBI Bank.

In fixed home loan rates with same number of EMI of all the 3 Banks, the EMI of PNB is lessthan the EMI of HDFC and SBI Bank. So this shows that PNB fixed home loan rates are

cheaper than SBI Bank and HDFC Bank.

PNB Floating Home Loan Rates are cheaper than HDFC Bank but as compared to SBI Bankthe rates of SBI Bank are yet cheaper.


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A customer would prefer SBI 10 Year Floating Home Loan Rates as the interest rates,processing fee, EMI and the total interest paid are less as compared to the other 2 Banks i.e.

ICICI Bank and PNB.

RECOMMENDATIONS

Banks should improve the quality of their products (Specially Home loan). Most of the private banks and public banks are much aggressive about home loan than PNB.

So, PNB should also be focus and aggressive about its home loan products. Many of the hidden costs are accumulate with the services, which are not informed to the

customers at the first time, and then customers suffer many of the problems. So, banks should

disclose all the fee structure, terms & conditions regarding the product before making sale.

In the bank premises front office executives are not co-operative with the customers. So,higher authority should keep control over these types of activities.

Most the banks believe in large sales force than the quality sales force, which are morecompetitive. So, banks should improve their quality sales force, which include the

competitive sales personnel.

Maximum number of borrowers were get influenced by dealer/agent and minimum byrelative. So bank requires introducing new advertisement for loan schemes.


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LIMITATIONS

This Industrial Project involved large amount of research but there was time constraint. The data was collected from the secondary source and collecting data from the primary source

was difficult.

Though people in India are aware of home loans but they are not aware of different types ofhome loans, their eligibility.

Collecting data regarding trends in housing finance was a difficult task.


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CONCLUSION

Punjab National Bank has taken a leap forward in expanding the housing finance market in a big way.

It has laid down various schemes for home loans categorised under fixed and floating variants which

proves to be beneficial for its customers.

The Interest rates provided by the PNB for home loans are also cheap from customer point of view.

Though SBI is its close competitor, PNB tries to provide as much good services to its customers in

regard of home loans.

Dedicated team of well-experienced employees who work on best-in-class information systems &

network to deliver and provide customer satisfaction


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BIBLIOGRAPHY

www.pnbindia.com

www.guide2homeloan.com

www.google.com
http://www.pnbindia.com/http://www.pnbindia.com/http://www.guide2homeloan.com/http://www.guide2homeloan.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.guide2homeloan.com/http://www.pnbindia.com/


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www.economictimes.com

www.moneycontrol.com
http://www.economictimes.com/http://www.economictimes.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.economictimes.com/